ZettaCap continues to forecast the Economic Freedom Fighters (EFF) significantly outperforming current consensus poll-based expectations in the May 8th South Africa general election. Their results should surprise many observers and financial market participants.
These forecasts are based on Social Media Influence (SMI) which was the first quantitative system to forecast out-of-consensus victories for Trump (US 2016), Macron (France 2017), and Bolsonaro (Brazil 2018) during their respective elections. SMI has a proven trackrecord of picking up underlying electoral trends that are more difficult to detect using traditional methods.
ZettaCap first posted its forecast in February (SMI SHOWS SOUTH AFRICA’S EFF TO SURGE IN 2019 ELECTION) with an update given in March (SOUTH AFRICAN ELECTION: EFF GAINS). The forecasts have remained consistent, projecting the EFF outperforming and the ANC underperforming polls.
The EFF has a far-left political agenda which includes nationalization of a number of key industries as well as land confiscation of white-owned farms. In previous elections, the EFF did not break the 10% vote barrier which many see as an obstacle. In the last general election in 2014, the EFF only obtained 6% of the vote while the latest mainstream poll by IPSOS puts them at 9.5%. Such single digit figures would not create a significant shift in domestic politics.
However, ZettaCap forecasts the EFF to easily surpass these figures. At 18%, our forecast is higher than any poll by a significant margin. Our forecast remains unchanged from our March update.
Recently, some polls have started to show declining support for the ANC and a stronger position for the EFF — in other words the trends laid out in February by ZettaCap. Even the media has shifted its tone. Recent articles from the last few week include:
With the election less than a week away, the consensus appears to be waking up to the prospect of the ANC potentially losing its majority and the EFF hitting double-digits. Such a shift would certainly radically change the longer term outlook for the country.
From a practical standpoint, we should restate that our forecast is a considerable outlier. It is almost 3x the actual result of the EFF from the last election and almost 2x the IPSOS poll forecast (depending on their turnout scenarios). As forecasts go, this one is extremely aggressive and should be seen as such.
From a market perspective, however, such excessive out-performance is not necessary to create waves. Given the party’s far-left policies, a more modest out-performance of polls (anywhere in the 12% – 16% range) would produce a rather significant impact.